Paramount, Venue should open to residents by early 2012

Downtown Escondido's most notorious eyesore will soon be flooded
with construction workers building nearly 200 apartments, the
developer of the partly built Paramount and Venue housing projects
said last week.

Construction on the two projects is expected to resume next
month after a nearly four-year delay that began when the largest
structure fire in Escondido history destroyed much of what had been
built prior to the January 2007 blaze, said Peter Zak, vice
president of community development for Lyon Capital Ventures of
Newport Beach.

The new housing, which will be built on downtown's northern edge
at Escondido Boulevard and Washington Avenue, is expected to
bolster nearby businesses and the struggling California Center for
the Arts, Escondido.

The projects are the most prominent of several downtown housing
developments planned before the real estate crash, which began in
2006, and subsequent recession. But the only projects built were 15
detached townhomes east of City Hall on Pennsylvania Avenue, and a
portion of the 102-unit City Square development at Second Avenue
and Centre City Parkway.

Mayor-elect Sam Abed said adding residential units downtown was
key to the city's vision of creating a bustling downtown area
filled with quality restaurants, entertainment and other
amenities.

"This will give people a choice between urban living and
suburban living in Escondido, which is important," Abed said.

Thora Guthrie, chief executive of the Downtown Business
Association, said many of the new residents would probably become
regular customers at downtown businesses. She said they would also
help revitalize nearby Grape Day Park.

Assistant City Manager Charlie Grimm said the pedestrian traffic
generated by the projects was a key part of the city's "smart
growth" philosophy for downtown, but he said the recession stifled
city attempts to fulfill that vision.

Zak said Lyon, which bought the two unfinished projects from
D.R. Horton in 2008, decided to move forward with construction
based on optimism that the job market will recover soon.

"We are confident there will be demand for high-quality
housing," Zak said.

Possible tenants could include employees of Palomar Medical
Center West, an 11-story hospital scheduled to open in western
Escondido in 2012, and faculty members and staff from Cal State San
Marcos, which is two stops from downtown Escondido on the nearby
Sprinter rail line.

"We've done an extensive amount of market research," Zak
said.

Lyon officials haven't yet decided what the rents will be, he
said.

"It's really too soon to speculate," said Zak. "The reality is
the market sets the rents, not us."

Rents in Escondido, Oceanside and San Marcos are typically much
lower than other cities in North County.

Data for spring 2010 from the San Diego County Apartment
Association show the average two-bedroom apartment in Escondido
rented for $1,144, compared to $1,658 in Carlsbad and $1,495 in
Vista. San Marcos, where the average was $1,072, was the only city
with cheaper rent than Escondido.

Zak said construction will resume next month on the 82-unit
Venue project, explaining that all necessary city permits had been
obtained for that development. He estimated that construction would
resume on the 116-unit Paramount during the first three months of
2011, once all permits had been obtained.